Oil Rises, Government Bonds Fall as Trump Steps Up Threats Against Iran
By Ronnie Harui
Oil rose, and government bond prices fell early Monday as President Trump stepped up his threats against Iran, intensifying concerns over supply disruptions in the Middle East. Government bond prices were weighed by concerns that higher oil prices could stoke inflation and spur central banks to hike interest rates faster or pause rate cuts for longer.
Trump threatened to destroy all of Iran's power plants if the nation's leaders don't agree to reopen the Strait of Hormuz by Tuesday evening. "If they don't come through, if they want to keep it closed, they're going to lose every power plant and every other plant they have in the whole country," Trump said in an interview with The Wall Street Journal on Sunday.
Monday marks the end of a 10-day deadline Trump gave Iran last month to make a deal and open the Strait of Hormuz, through which around 20% of the world's oil is transported. In the WSJ interview, Trump moved the deadline to Tuesday, and on Sunday afternoon, without elaboration, Trump posted "Tuesday, 8:00 P.M. Eastern Time!"
Front-month West Texas Intermediate crude oil futures rose 0.9% to $112.53 per barrel and front-month Brent crude oil futures advanced 1.7% to $110.84 a barrel, according to ICE data.
The yield on 10-year Japanese government bonds rose 2 basis points to 2.400%, the highest intraday level since February 1999, according to data provider Quick. The yield on 10-year U.S. Treasurys rose 4 basis points to 4.3575%, according to FactSet data. Bond yields move inversely to prices.
"Markets continue to be roiled by the heightened uncertainty surrounding this unprecedented Middle East geopolitical tensions that wreak havoc not only in terms of dis-anchoring steady inflation into an unprecedented built-up in the inflation expectations but also brings about supply disruption risks that could put already weakening growth prospects at further risks," UOB's Global Economics & Markets Research team said in a note.
Meanwhile, the equities markets were higher in holiday-thinned trade with the Nikkei Stock Average recently up 0.7% at 53513.71 and South Korea's Kospi opening 0.9% higher at 5423.35. Markets in China, Hong Kong, Taiwan, Australia, and New Zealand are closed Monday for a holiday.
Write to Ronnie Harui at ronnie.harui@wsj.com
(END) Dow Jones Newswires
April 05, 2026 21:05 ET (01:05 GMT)
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